COST/QUALITY TRADE-OFFS IN THE DEPARTURE PROCESS? EVIDENCE FROM THE MAJOR U.S. AIRLINES

Higher costs should lead to higher quality, according to conventional thinking. In airline departures, longer scheduled turnaround times and higher per passenger airport staffing levels should lead to better on-time performance, customer satisfaction, baggage handling, and safety. To test the foregoing hypothesis, a unique longitudinal measure or scheduled turnaround time for the 10 major U.S. carriers was used, controlling for aspects of product complexity such as flight length, passengers per flight, cargo per flight, meal service, and percentage of passengers who connect. Longer turnaround times and higher staffing levels are found to be associated with worse on-time performance, customer satisfaction, baggage handling accuracy, and safety, controlling for product complexity. In addition, individual airlines vary greatly in the efficiency with which they use turn time and staffing resources to achieve these outcomes. Field research suggests that longer turnaround times are a form of organizational slack that detracts from organizational learning. Conversely, quick turnaround strategies may have an organizational learning spillover effect on other departure outcomes. The traditional logic suggests a trade-off between cost and quality such that turnaround time and staffing must be increased to improve on-time performance, baggage handling, customer satisfaction, and safety. The new logic suggests that low levels of resource use can lead to better outcomes, with the support of organizational practices conducive to learning. Toyota introduced this logic into the automobile industry with its just-in-time inventory system; Southwest has introduced it into the airline industry.

Language

  • English

Media Info

  • Features: Figures; References; Tables;
  • Pagination: p. 25-36
  • Monograph Title: Public-Sector Aviation Issues. Graduate Research Award Papers 1993-1994
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00712970
  • Record Type: Publication
  • ISBN: 0309061180
  • Files: TRIS, TRB
  • Created Date: Oct 10 1995 12:00AM